The European Central Bank is swapping its Greek bonds for new ones to ensure it isn't forced to take losses in a debt restructuring, three euro-area officials said.

The Frankfurt-based ECB is exchanging its Greek bonds for bonds of an identical structure and nominal value, with the only difference being that they would be exempt from so-called collective action clauses, the officials said late yesterday on condition of anonymity. One said the bonds have a face value of about 50 billion euros ($65 billion). An ECB spokesman declined to comment. Giorgios Zanias, chairman of the Council of Economic Advisors to the Greek finance ministry, didn't respond to calls to his cellphone.

The move may be completed by Monday, the officials said.

That could pave the way for a private-sector bond swap that aims to slice about 100 billion euros off Greece's debt as the embattled nation struggles to stave off default. Euro-area finance ministers convene in Brussels on Feb. 20 to discuss a second bailout for Greece that includes a debt swap agreement.

An exemption from collective action clauses, or CACs, would mean the ECB would not have to participate should the Greek government impose involuntary losses on bondholders in future.

Eoin Treacy's view The ECB has been adamant that it will not accept losses on its holdings of peripheral sovereign bonds. In this regard it is attempting to imitate the IMF which will not lend unless it is sure it will get its money back. However, since the ECB is a large holder of Greek debt, and because the next tranche of Greece's bailout hinges on the need to get as many creditors as possible to sign up for the debt forgiveness program, the ECB had to make some concession.

It is now suggested that the ECB will distribute the coupons from its Greek investments to other governments or invest them in EFSF/ESM bonds. This has been welcomed by the bond markets with the yield on Spanish and Italian in particular pulling back. German10-year futures retested the 140 area earlier this week but encountered resistance and now look likely to at least retest the 137 area.